If Tommy's Tank Tops is a perfectly competitive firm and is currently making positive economic profits of $1,000:

Question

Quizplus · Accepted Answer

Positive economic profits in a perfectly competitive market indicate that the market price of tank tops is higher than the average total cost of producing them. This profit signal attracts new firms to enter the market to capture a share of the profits. As more firms enter, the market supply increases, causing the price to decrease until economic profits are equal to zero. Therefore, option A is the best choice.

If Tommy's Tank Tops Is a Perfectly Competitive Firm and Is